Key Takeaways:
- Coinshares report shows Ethereum investment vehicles are losing investor interest.
- ETH prices have formed a bearish pattern that forecasts 56% losses for the token.
NEW DELHI (CoinChapter.com) — Ethereum investment instruments seem to be losing institutional investment. The prime altcoin saw declining inflows over the last three weeks, as per Coinshares Digital Asset Fund Flows latest weekly report.
On the other hand, competing Layer 1 blockchains have attracted investor interest. For example, in the week ending Apr 22, Avalanche (AVAX), Solana (SOL), Terra (LUNA), and Algorand (ALGO) saw inflows totaling $3.5 million.
The Ether token registered outflows of $16.9 million. Combined with ETH outflows over the previous two weeks, the prime altcoin has seen outflows totaling $59.3 million in three weeks. The recent outflow brought Ethereum’s year-to-date outflows to $169 million.
Also Read: Ethereum (ETH) loses critical support at $3K as the price dips 20%.
Declining inflows in 2022 seem to indicate a bearish mindset towards Ethereum from institutions. On the other hand, Bitcoin (BTC) investment vehicles saw minor inflows of $2.6 million for the first time in the last three weeks. However, month-to-date outflows for BTC 0remain at $178 million.
Ether Charts Descending Triangle Pattern
Ether price action caused the ETH token to paint a bearish technical pattern called the descending triangle. In detail, a descending trendline joining swing highs and a horizontal trendline joining swing lows form the pattern. Volume helps determine the validity of a breakout.
Prices bounce between the converging trendlines until traders start a sell-off that pushes prices below the lower trendline of the pattern.
The height of the triangle’s thickest section determines the price target in a descending triangle setup. In the case of ETH, the prime altcoin risks falling to $1,321, a fall of nearly 56% from current price levels.
ETH Price Chart
ETH prices have been moving above rising trendline support since Jan 24. However, ETH’s 20-day moving average (red wave) looks poised to move below its 50-day MA (yellow wave) to form a bearish technical pattern called death cross.
Traders believe the technical pattern signals negative sentiment and weakness. Monday’s long lower wick indicates bulls are defending ETH’s downtrend.
But, a death cross might increase bearish pressure, resulting in ETH prices breaking below immediate support from its 100-day MA (yellow wave) near $2,930.Further downtrend would see Ether prices fall to support from its ascending trendline near $2,800.
Finally, a marketwide sell-off would see the Ether token test support near $2,700 before recovering.
Although momentum oscillator MACD continues to be bearish for Ether, bars on the MACD histogram, which charts the difference between the MACD line (difference between 12-day and 26-day EMA) and the MACD signal line (9-day EMA of MACD), are contracting.
Also Read: Crypto Recaps Ep01: Ethereum and its growth in the smart contract ecosystem so far.
Contracting negative bars indicate increasing bullishness in ETH price momentum. If bulls start an uptrend, ETH prices would need to move above the 20-day MA (red wave) and 50-day MA (yellow wave) resistance confluence near $3,043.
After flipping immediate resistance, ETH prices would move to target resistance near $3,150. Finally, a sustained uptrend might see the Ether token challenge resistance near $3,300, a price level that has acted as resistance for Ethereum price action since Jan 7 this year.
At the time of writing, ETH was trading at $3,004, down 1.56% on the day.
